Sentiment on the North Sea mixed butane market has turned slightly more bullish on tighter availability, according to industry sources Tuesday. During the summer North Sea mixed butane is used in Northwest Europe by the gasoline-related sector in the production of alkylate and MTBE. Mixed and normal butane can also be used by the petrochemicals sector as an alternative feedstock to naphtha, providing the delivered butane price is at a discount to the delivered naphtha price.
Market activity has been quite thin over July, partly due to a lack of public buying interest from either the gasoline-related or petrochemicals sectors.
"There is no prompt demand in the market," said one industry source.
But spot North Sea availability has also been tight this month with no public offers for spot product.
Industry sources said that they expected this tightness in spot availability to continue into August with planned North Sea maintenance forecast to reduce butane production.
"There is not a lot of butane around," said another trading source.
Based on Platts data the CIF mixed butane/CIF naphtha price ratio was about 92% for the first half of July, but has now strengthened slightly to 93% on the more bullish butane sentiment.
The outright price of CIF North Sea butane, which generally tracks naphtha pricing, has increased steadily over July moving up from $765/mt at the start of the month to a last published level Monday of $814/mt.
